SEC Filings

Purchase consideration was allocated to assets acquired and liabilities assumed based on estimated fair values as
follows (in thousands):

Cash and cash equivalents

$

6,007

Accounts receivable

17,835

Inventories

21,733

Other current assets

2,534

Property, plant and equipment

18,359

Other non-current assets

50

Identifiable intangible assets

150,500

Goodwill

86,056

Total assets acquired

303,074

Current liabilities assumed

(27,434

)

Non-current liabilities assumed

(7,984

)

Deferred income taxes

(26,105

)

Net assets acquired, Powder Finishing

241,551

Investment in businesses held separate

426,813

Total purchase consideration

$

668,364

Identifiable intangible assets and estimated useful life are as follows (dollars in thousands):

Estimated Life (years)

Customer relationships

$

103,500

14

Developed technology

9,600

11

Trade names

37,400

Indefinite

Total identifiable intangible assets

$

150,500

The Company adjusted the preliminary purchase price allocation in the fourth quarter of 2012 to recognize deferred tax
liability on certain identifiable intangible assets, which resulted in an $8 million increase in goodwill. Substantially none of the goodwill acquired in 2012 is deductible for tax purposes.

In the fourth quarter of 2014, the FTC approved a final decision and order that became effective on October 9, 2014. Pursuant to the final order, Graco
must sell the Liquid Finishing business assets within 180 days of the effective date. On October 8, 2014, the Company announced it had signed a definitive agreement to sell the Liquid Finishing business assets for $590 million cash, subject to
regulatory approval and other customary closing conditions. The sale transaction is expected to close in the first half of 2015, in compliance with the FTCs final decision and order. Graco will continue to hold the Liquid Finishing businesses
separate and maintain them as viable and competitive until the sale process is complete.

The Liquid Finishing business assets are held as a cost-method
investment on the Consolidated Balance Sheets. Income is recognized based on dividends received from after-tax earnings of Liquid Finishing and included in other expense (income) on the Consolidated Statements of Earnings. Dividends received totaled
$28 million in 2014, $28 million in 2013 and $12 million in 2012. Once the Company completes the sale of its investment, there will be no further dividends from Liquid Finishing.

The Company evaluates its cost-method investment for other-than-temporary impairment at each reporting period. As of December 26, 2014, the Company
evaluated its investment in Liquid Finishing and determined that there is no impairment.

Sales and operating earnings of the Liquid Finishing businesses
were as follows (unaudited, in thousands):